Weekly ag update, Issue 54-14 (March 29, 2004)

CROP AND LIVESTOCK CONDITION PERCENTAGES
Very Poor Poor Fair Good Excellent
Alfalfa 1 4 60 32 3
Lettuce – – 10 40 50
Onions – – 8 86 6
Wheat ( All) 26 15 37 20 2
Cattle 11 18 41 30 --
Sheep 18 16 33 30 3
Range/ Pasture 39 42 18 1 --
INCLUDED IN THIS ISSUE
Crop Weather ERS
Available on Internet at: www. nass. usda. gov/ nm OR by e- mail ( call 1- 800- 530- 8810 for information)
New Mexico Agricultural
Statistics Service
WeeklyAg Update
Issue 54- 14 1- 800- 530- 8810 e- mail: nass- nm@ nass. usda. gov March 29, 2004
CROP SUMMARY FOR THE WEEK ENDING MARCH 28, 2004
NEW MEXICO: There were 6.9 days suitable for fieldwork. Farmers spent the week preparing ground, irrigating, and planting
chile. There was moderate wind damage at 14% and 9% light damage. Alfalfa conditions were 1% very poor, 4% poor, 60%
fair, 32% good, and 3% excellent. Winter wheat conditions were listed as 26% very poor, 15% poor, 37% fair, 20% good and
2% excellent while 42% was grazed. Lettuce conditions were mostly good to excellent. Chile was reported at 53% planted
and onions were completely planted and reported in mostly good condition. Sheep producers have begun shearing and cattle
ranchers continued with supplemental feeding as they prepare for calving season. Cattle conditions were 11% very poor, 18%
poor, 41% fair, and 30% good. Sheep conditions were 18% very poor, 16% poor, 33% fair, 30% good and 3% excellent.
Range and pasture conditions were 39% very poor, 42% poor, 18% fair and 1% good.
CROP PROGRESS PERCENTAGES WITH COMPARISONS
CROP PROGRESS This Week Last Week Last Year 5- Year Average
CHILE Planted 53 38 42 39
WHEAT ( All) Grazed 42 30 28 1/
1/ Not available
2
SOIL MOISTURE PERCENTAGES
Very
Short Short Adequate Surplus
Northwest 28 23 48 1
Northeast 52 44 4 --
Southwest 50 50 – --
Southeast 20 32 48 --
State 36 36 28 --
State- Last Year 22 42 34 2
State- 5- Yr Avg. 26 28 45 1
WEATHER SUMMARY
Last week was warm and dry over New Mexico. The only precipitation was associated with a storm early in the week that
produced spotty rain and snow... mainly over the higher elevations. Red River (. 42") and Ruidoso (. 25") were the only spots
that measured as much as a quarter of an inch. Temperatures averaged 10 degrees above normal for the state, and
afternoon readings reached the 80' s at many lower elevation stations on several days.
NEW MEXICO WEATHER CONDITIONS MARCH 22 - 28, 2004
Temperature Precipitation
Station Mean Maximum Minimum 03/ 22
03/ 28
03/ 01
03/ 28
Normal
Mar
01/ 01
03/ 28
Normal
Jan- Mar
Carlsbad 66.6 88 46 T 1.70 0.30 2.90 1.00
Tatum 62.5 84 41 0.00 1.16 0.52 3.64 1.41
Roswell 65.1 86 43 0.00 0.15 0.45 1.67 1.34
Clayton 58.2 80 29 T 0.63 0.55 1.28 1.10
Clovis 61.9 82 39 0.00 1.15 0.59 2.86 1.49
Tucumcari 61.8 84 34 T 0.74 0.40 1.50 1.13
Chama 41.5 70 10 0.14 0.25 1.99 5.22 5.34
Johnson Ranch 49.9 73 25 0.00 0.29 0.74 1.89 1.98
Capulin 49.4 74 22 T 0.47 0.89 1.24 1.85
Las Vegas 52.4 73 28 0.00 0.38 0.56 0.76 1.27
Los Alamos 52.3 68 36 0.02 0.86 1.22 3.49 2.88
Raton 50.4 76 21 T 0.18 0.83 0.99 1.84
Santa Fe 52.7 73 30 0.08 0.57 0.74 1.26 2.06
Red River 41.6 65 19 0.42 1.07 1.78 3.78 4.07
Farmington 56.0 79 30 T 0.05 0.81 1.29 1.97
Gallup 49.1 73 14 0.02 0.39 1.05 1.34 2.59
Grants 50.9 73 24 0.05 0.18 0.50 0.90 1.50
Silver City 55.0 73 35 T 1.14 0.96 4.24 3.37
Quemado 48.5 73 18 0.01 0.29 0.80 1.57 2.35
Albuquerque 59.4 76 39 0.04 0.67 0.54 1.94 1.44
Carrizozo 56.2 78 31 0.00 0.32 0.57 1.62 1.74
Gran Quivera 55.7 74 31 0.00 0.15 0.72 2.13 2.24
Moriarty 54.9 80 28 0.00 0.77 0.53 2.56 1.44
Ruidoso 51.2 69 31 0.25 0.34 1.33 2.20 3.61
Socorro 59.8 82 38 0.00 0.00 0.27 0.50 1.05
Alamogordo 63.7 81 47 0.00 1.07 0.46 1.80 1.67
Animas 63.6 81 42 0.02 1.33 0.47 3.44 1.66
Deming 61.3 82 40 T 0.96 0.34 2.16 1.36
T or C 61.9 83 44 0.03 0.52 0.34 0.79 1.18
Las Cruces 65.0 83 47 0.00 1.20 0.22 1.51 1.05
( T) Trace (-) No Report (*) Correction
All reports based on preliminary data. Precipitation data corrected monthly from official observation forms.
3
LIVESTOCK, DAIRY, AND POULTRY OUTLOOK
USDA, ERS
March 16, 2004
Dairy Outlook for 2004: Last year was a year of
transition. The surge in dairy farm expansions and the
period of very low exit of weaker farms, both triggered by
the generally high returns of 1996- 2001, finally came to an
end. Meanwhile, dairy product demand was slowly moving
out of its late 2001- 2002 weakness. It only remained to
work off the huge butter stocks before dairy markets could
return to better balance— something that was
accomplished by yearend.
Conditions in 2004 promise to be considerably different.
Farm structural changes are likely to show the effects of
the low 2002- 03 returns, while milk per cow is beset with
a number of possible weaknesses. Demand appears to be
mostly back to normal, and stocks are moderate. Prices
are expected to recover this year.
Demand Slowly Recovering: Recent patterns of
commercial use illustrate how the structure of dairy product
demand has changed over the years. Restaurant use of
butter and cheese began to weaken in late 2001- early
2002 in response to economic softness and shifting
consumer expenditures. This weakness persisted well into
2003. By late in the year, economic recovery had brought
restaurant spending back, and cheese and butter use were
showing some strength. However, dairy demand from this
sector still lagged the very brisk 1999- 2001 period.
Food processor use of dairy products as ingredients was
particularly sluggish during the last 2 years. Dairy
products are generally used to boost quality in premium
versions of foods, a position that makes them vulnerable
when consumers become more conservative about food
spending. There may have been a modest recovery in
ingredient use late in 2003, but this segment generally
remains weak.
The retail segment was a bit more robust than the other
segments in 2003 but was somewhat sluggish most of the
year. Consumers seemed to be passing by the treats they
had bought in earlier years. However, the autumn holiday
season reportedly was the strongest in a number of years.
Despite generally favorable dairy prices in 2003,
commercial use grew only modestly. Milkfat sales grew
about 2 percent following 2002' s fractional increase. The
2003 use of skim solids was about 1 percent larger than in
2002, after no growth that year. Cheese sales rose only
about 1 percent as a slip in American cheese use offset
part of the gain for other varieties. Restaurant woes may
have been particularly important for American cheese
sales. Commercial disappearance of butter rose 1 percent
in 2003, as strength late in the year overcame early
declines. However, butter use probably was even stronger
than autumn disappearance data indicate because the
very disappointing 2002 holiday season probably had left
swollen pipeline holdings at the start of 2003. Fluid milk
sales slipped fractionally, while use of most perishable
manufactured products was weak.
Dairy demand appears to have gained some momentum
during 2003 and is expected to continue its recovery this
year. The restaurant segment is projected to do better, and
ingredient use should come back somewhat. However, the
improvement as yet has not been either steady or strong.
Consumer spending may stay unsettled. In addition, it is
unclear what the effects of recent intense media attention
on weight problems might be.
Commercial use of all dairy products is projected to grow
about 1 percent on a milkfat basis in 2004. Boosted by
expected larger ingredient use, commercial use on a skim
solids basis is projected to rise more-- about 2 percent.
Although welcome, these increases represent only modest
recovery in dairy demand.
Milk Production Slows: Milk per cow grew only
fractionally in 2003. More tellingly, the rise from the 5- year
moving average was dramatically below the long- run trend.
However, this has been far from unusual in recent years.
Expansion has been well below average for 3 straight
years and for 6 of the last 8 years.
A number of factors contributed to last year’s sluggish
gains in milk per cow. Milk prices were low relative to
concentrate feed prices. Although the milk- feed price ratio
does not shape gains in output per cow as much as
formerly, recent ratios have made producers cautious
about boosting concentrate feeding. In addition, 2003
resembled 2002 in having large amounts of mediocre
alfalfa hay but tight supplies of good hay.
Other factors probably included an unusually large share
of first- calf heifers in the milking herd and somewhat
conservative use of bovine somatotropin ( BST). Supplies
of heifers available to start production in 2003 were quite
large, a welcome relief from the heifer shortage of 2002.
But, such a large cohort of heifers serves to lower average
milk per cow the first year. Low milk prices probably made
farmers leery of using BST on cows other than those with
high odds of a profitable response.
Monsanto has announced that it will accept no new BST
customers in 2004 and that established users will be
allowed only half their normal purchases. With more than
a fifth of the cow herd currently receiving the hormone,
reduced availability will significantly affect 2004 milk per
cow. Somewhat unattractive milk- feed price ratios and
uneven forage quality probably will also work against
4
UNITED STATES DEPARTMENT OF AGRICULTURE
NEW MEXICO AGRICULTURAL STATISTICS
PO BOX 1809
LAS CRUCES, NM 88004- 1809
recovery in milk per cow. On the other hand, a much
smaller number of first- calf heifers should spur gains in
milk per cow. Milk per cow in 2004 is expected to rise only
slightly more than 1 percent from 2003 on a daily
average basis. Growth may pick up later in the year but
significant recovery probably will have to wait until 2005.
Changes in milk cow numbers during 2002 and 2003, like
most earlier periods, were driven by structural changes
induced by milk prices and returns. What made these
years different was the delay between changes in returns
and the effects of structural adjustments. The generally
high returns of 1996- 2001 unleashed a wave of dairy farm
expansions during 2001 and 2002. However, many of
these new facilities were not completely filled until 2003
because of the shortage of dairy replacements. These
expansions bolstered milk cow numbers into early 2003.
Similarly, the rate of farms exiting was relatively low in
2001 because of the strong returns. The exit rate stayed
slow during most of 2002 in spite of sharply lower returns.
Even the relatively weak farms entered the year much
better able to continue than normal, and their ability to
persist was further enhanced by the Milk Income Loss
Contract payments. However, the low returns were taking
their toll by late 2002 and 2003, and the exit rate picked up
considerably.
Milk cow numbers declined rapidly during the last three-quarters
of 2003, going from 0.3 percent above a year
earlier in January- March to 1.4 percent below in October-
December. Once expansions began to slow, the
accelerated exit rate became the dominant force shaping
cow numbers. In addition, rising cull cow prices during the
year and the much lower replacement price throughout
2003 sharply narrowed the gap between replacement and
slaughter values, lowering the share of cows in exiting
herds that went into other herds.
Returns in 2004 are expected to be somewhat stronger
than in 2002 or 2003 but still relatively weak. Dairy farm
exits probably will remain numerous. Expansion by
stronger producers might pick up a bit after the 2003 hiatus
but is projected to stay fairly modest.
Significantly fewer heifers will enter the milking herd this
year, even though the overall herd of replacement heifers
on January 1 was only 2 percent below a year earlier. An
unusually large share of the year- earlier heifers were older
animals, and the number expected to begin milking in 2004
was down 4 percent. And, no Canadian replacements will
be available so long as the ban on importation of live
animals continues. Although new regulations are in the
comment process, it is uncertain when the current
prohibition will end.
Cull cow markets remain unsettled. The loss of beef
exports will require that additional quantities of fed beef be
absorbed domestically, weakening cow beef prices as well
as fed prices. In addition, some buyers reportedly are
hesitating to deal with older dairy cows. However, beef
supplies remain tight, demand has held, and cow prices
are projected to stay fairly high.
Milk cow numbers are projected to decline at a fairly rapid
rate throughout 2004. For the year, cows are expected to
average almost 2 percent fewer than in 2003, the largest
decline since at least 1991. Milk production in 2004, on a
daily average basis, is projected to be about the same as
in 2003. Production in 2003 was likewise steady. Such
stability would be highly unusual in an industry where
typical shifts in output have become much larger than in
the past.

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CROP AND LIVESTOCK CONDITION PERCENTAGES
Very Poor Poor Fair Good Excellent
Alfalfa 1 4 60 32 3
Lettuce – – 10 40 50
Onions – – 8 86 6
Wheat ( All) 26 15 37 20 2
Cattle 11 18 41 30 --
Sheep 18 16 33 30 3
Range/ Pasture 39 42 18 1 --
INCLUDED IN THIS ISSUE
Crop Weather ERS
Available on Internet at: www. nass. usda. gov/ nm OR by e- mail ( call 1- 800- 530- 8810 for information)
New Mexico Agricultural
Statistics Service
WeeklyAg Update
Issue 54- 14 1- 800- 530- 8810 e- mail: nass- nm@ nass. usda. gov March 29, 2004
CROP SUMMARY FOR THE WEEK ENDING MARCH 28, 2004
NEW MEXICO: There were 6.9 days suitable for fieldwork. Farmers spent the week preparing ground, irrigating, and planting
chile. There was moderate wind damage at 14% and 9% light damage. Alfalfa conditions were 1% very poor, 4% poor, 60%
fair, 32% good, and 3% excellent. Winter wheat conditions were listed as 26% very poor, 15% poor, 37% fair, 20% good and
2% excellent while 42% was grazed. Lettuce conditions were mostly good to excellent. Chile was reported at 53% planted
and onions were completely planted and reported in mostly good condition. Sheep producers have begun shearing and cattle
ranchers continued with supplemental feeding as they prepare for calving season. Cattle conditions were 11% very poor, 18%
poor, 41% fair, and 30% good. Sheep conditions were 18% very poor, 16% poor, 33% fair, 30% good and 3% excellent.
Range and pasture conditions were 39% very poor, 42% poor, 18% fair and 1% good.
CROP PROGRESS PERCENTAGES WITH COMPARISONS
CROP PROGRESS This Week Last Week Last Year 5- Year Average
CHILE Planted 53 38 42 39
WHEAT ( All) Grazed 42 30 28 1/
1/ Not available
2
SOIL MOISTURE PERCENTAGES
Very
Short Short Adequate Surplus
Northwest 28 23 48 1
Northeast 52 44 4 --
Southwest 50 50 – --
Southeast 20 32 48 --
State 36 36 28 --
State- Last Year 22 42 34 2
State- 5- Yr Avg. 26 28 45 1
WEATHER SUMMARY
Last week was warm and dry over New Mexico. The only precipitation was associated with a storm early in the week that
produced spotty rain and snow... mainly over the higher elevations. Red River (. 42") and Ruidoso (. 25") were the only spots
that measured as much as a quarter of an inch. Temperatures averaged 10 degrees above normal for the state, and
afternoon readings reached the 80' s at many lower elevation stations on several days.
NEW MEXICO WEATHER CONDITIONS MARCH 22 - 28, 2004
Temperature Precipitation
Station Mean Maximum Minimum 03/ 22
03/ 28
03/ 01
03/ 28
Normal
Mar
01/ 01
03/ 28
Normal
Jan- Mar
Carlsbad 66.6 88 46 T 1.70 0.30 2.90 1.00
Tatum 62.5 84 41 0.00 1.16 0.52 3.64 1.41
Roswell 65.1 86 43 0.00 0.15 0.45 1.67 1.34
Clayton 58.2 80 29 T 0.63 0.55 1.28 1.10
Clovis 61.9 82 39 0.00 1.15 0.59 2.86 1.49
Tucumcari 61.8 84 34 T 0.74 0.40 1.50 1.13
Chama 41.5 70 10 0.14 0.25 1.99 5.22 5.34
Johnson Ranch 49.9 73 25 0.00 0.29 0.74 1.89 1.98
Capulin 49.4 74 22 T 0.47 0.89 1.24 1.85
Las Vegas 52.4 73 28 0.00 0.38 0.56 0.76 1.27
Los Alamos 52.3 68 36 0.02 0.86 1.22 3.49 2.88
Raton 50.4 76 21 T 0.18 0.83 0.99 1.84
Santa Fe 52.7 73 30 0.08 0.57 0.74 1.26 2.06
Red River 41.6 65 19 0.42 1.07 1.78 3.78 4.07
Farmington 56.0 79 30 T 0.05 0.81 1.29 1.97
Gallup 49.1 73 14 0.02 0.39 1.05 1.34 2.59
Grants 50.9 73 24 0.05 0.18 0.50 0.90 1.50
Silver City 55.0 73 35 T 1.14 0.96 4.24 3.37
Quemado 48.5 73 18 0.01 0.29 0.80 1.57 2.35
Albuquerque 59.4 76 39 0.04 0.67 0.54 1.94 1.44
Carrizozo 56.2 78 31 0.00 0.32 0.57 1.62 1.74
Gran Quivera 55.7 74 31 0.00 0.15 0.72 2.13 2.24
Moriarty 54.9 80 28 0.00 0.77 0.53 2.56 1.44
Ruidoso 51.2 69 31 0.25 0.34 1.33 2.20 3.61
Socorro 59.8 82 38 0.00 0.00 0.27 0.50 1.05
Alamogordo 63.7 81 47 0.00 1.07 0.46 1.80 1.67
Animas 63.6 81 42 0.02 1.33 0.47 3.44 1.66
Deming 61.3 82 40 T 0.96 0.34 2.16 1.36
T or C 61.9 83 44 0.03 0.52 0.34 0.79 1.18
Las Cruces 65.0 83 47 0.00 1.20 0.22 1.51 1.05
( T) Trace (-) No Report (*) Correction
All reports based on preliminary data. Precipitation data corrected monthly from official observation forms.
3
LIVESTOCK, DAIRY, AND POULTRY OUTLOOK
USDA, ERS
March 16, 2004
Dairy Outlook for 2004: Last year was a year of
transition. The surge in dairy farm expansions and the
period of very low exit of weaker farms, both triggered by
the generally high returns of 1996- 2001, finally came to an
end. Meanwhile, dairy product demand was slowly moving
out of its late 2001- 2002 weakness. It only remained to
work off the huge butter stocks before dairy markets could
return to better balance— something that was
accomplished by yearend.
Conditions in 2004 promise to be considerably different.
Farm structural changes are likely to show the effects of
the low 2002- 03 returns, while milk per cow is beset with
a number of possible weaknesses. Demand appears to be
mostly back to normal, and stocks are moderate. Prices
are expected to recover this year.
Demand Slowly Recovering: Recent patterns of
commercial use illustrate how the structure of dairy product
demand has changed over the years. Restaurant use of
butter and cheese began to weaken in late 2001- early
2002 in response to economic softness and shifting
consumer expenditures. This weakness persisted well into
2003. By late in the year, economic recovery had brought
restaurant spending back, and cheese and butter use were
showing some strength. However, dairy demand from this
sector still lagged the very brisk 1999- 2001 period.
Food processor use of dairy products as ingredients was
particularly sluggish during the last 2 years. Dairy
products are generally used to boost quality in premium
versions of foods, a position that makes them vulnerable
when consumers become more conservative about food
spending. There may have been a modest recovery in
ingredient use late in 2003, but this segment generally
remains weak.
The retail segment was a bit more robust than the other
segments in 2003 but was somewhat sluggish most of the
year. Consumers seemed to be passing by the treats they
had bought in earlier years. However, the autumn holiday
season reportedly was the strongest in a number of years.
Despite generally favorable dairy prices in 2003,
commercial use grew only modestly. Milkfat sales grew
about 2 percent following 2002' s fractional increase. The
2003 use of skim solids was about 1 percent larger than in
2002, after no growth that year. Cheese sales rose only
about 1 percent as a slip in American cheese use offset
part of the gain for other varieties. Restaurant woes may
have been particularly important for American cheese
sales. Commercial disappearance of butter rose 1 percent
in 2003, as strength late in the year overcame early
declines. However, butter use probably was even stronger
than autumn disappearance data indicate because the
very disappointing 2002 holiday season probably had left
swollen pipeline holdings at the start of 2003. Fluid milk
sales slipped fractionally, while use of most perishable
manufactured products was weak.
Dairy demand appears to have gained some momentum
during 2003 and is expected to continue its recovery this
year. The restaurant segment is projected to do better, and
ingredient use should come back somewhat. However, the
improvement as yet has not been either steady or strong.
Consumer spending may stay unsettled. In addition, it is
unclear what the effects of recent intense media attention
on weight problems might be.
Commercial use of all dairy products is projected to grow
about 1 percent on a milkfat basis in 2004. Boosted by
expected larger ingredient use, commercial use on a skim
solids basis is projected to rise more-- about 2 percent.
Although welcome, these increases represent only modest
recovery in dairy demand.
Milk Production Slows: Milk per cow grew only
fractionally in 2003. More tellingly, the rise from the 5- year
moving average was dramatically below the long- run trend.
However, this has been far from unusual in recent years.
Expansion has been well below average for 3 straight
years and for 6 of the last 8 years.
A number of factors contributed to last year’s sluggish
gains in milk per cow. Milk prices were low relative to
concentrate feed prices. Although the milk- feed price ratio
does not shape gains in output per cow as much as
formerly, recent ratios have made producers cautious
about boosting concentrate feeding. In addition, 2003
resembled 2002 in having large amounts of mediocre
alfalfa hay but tight supplies of good hay.
Other factors probably included an unusually large share
of first- calf heifers in the milking herd and somewhat
conservative use of bovine somatotropin ( BST). Supplies
of heifers available to start production in 2003 were quite
large, a welcome relief from the heifer shortage of 2002.
But, such a large cohort of heifers serves to lower average
milk per cow the first year. Low milk prices probably made
farmers leery of using BST on cows other than those with
high odds of a profitable response.
Monsanto has announced that it will accept no new BST
customers in 2004 and that established users will be
allowed only half their normal purchases. With more than
a fifth of the cow herd currently receiving the hormone,
reduced availability will significantly affect 2004 milk per
cow. Somewhat unattractive milk- feed price ratios and
uneven forage quality probably will also work against
4
UNITED STATES DEPARTMENT OF AGRICULTURE
NEW MEXICO AGRICULTURAL STATISTICS
PO BOX 1809
LAS CRUCES, NM 88004- 1809
recovery in milk per cow. On the other hand, a much
smaller number of first- calf heifers should spur gains in
milk per cow. Milk per cow in 2004 is expected to rise only
slightly more than 1 percent from 2003 on a daily
average basis. Growth may pick up later in the year but
significant recovery probably will have to wait until 2005.
Changes in milk cow numbers during 2002 and 2003, like
most earlier periods, were driven by structural changes
induced by milk prices and returns. What made these
years different was the delay between changes in returns
and the effects of structural adjustments. The generally
high returns of 1996- 2001 unleashed a wave of dairy farm
expansions during 2001 and 2002. However, many of
these new facilities were not completely filled until 2003
because of the shortage of dairy replacements. These
expansions bolstered milk cow numbers into early 2003.
Similarly, the rate of farms exiting was relatively low in
2001 because of the strong returns. The exit rate stayed
slow during most of 2002 in spite of sharply lower returns.
Even the relatively weak farms entered the year much
better able to continue than normal, and their ability to
persist was further enhanced by the Milk Income Loss
Contract payments. However, the low returns were taking
their toll by late 2002 and 2003, and the exit rate picked up
considerably.
Milk cow numbers declined rapidly during the last three-quarters
of 2003, going from 0.3 percent above a year
earlier in January- March to 1.4 percent below in October-
December. Once expansions began to slow, the
accelerated exit rate became the dominant force shaping
cow numbers. In addition, rising cull cow prices during the
year and the much lower replacement price throughout
2003 sharply narrowed the gap between replacement and
slaughter values, lowering the share of cows in exiting
herds that went into other herds.
Returns in 2004 are expected to be somewhat stronger
than in 2002 or 2003 but still relatively weak. Dairy farm
exits probably will remain numerous. Expansion by
stronger producers might pick up a bit after the 2003 hiatus
but is projected to stay fairly modest.
Significantly fewer heifers will enter the milking herd this
year, even though the overall herd of replacement heifers
on January 1 was only 2 percent below a year earlier. An
unusually large share of the year- earlier heifers were older
animals, and the number expected to begin milking in 2004
was down 4 percent. And, no Canadian replacements will
be available so long as the ban on importation of live
animals continues. Although new regulations are in the
comment process, it is uncertain when the current
prohibition will end.
Cull cow markets remain unsettled. The loss of beef
exports will require that additional quantities of fed beef be
absorbed domestically, weakening cow beef prices as well
as fed prices. In addition, some buyers reportedly are
hesitating to deal with older dairy cows. However, beef
supplies remain tight, demand has held, and cow prices
are projected to stay fairly high.
Milk cow numbers are projected to decline at a fairly rapid
rate throughout 2004. For the year, cows are expected to
average almost 2 percent fewer than in 2003, the largest
decline since at least 1991. Milk production in 2004, on a
daily average basis, is projected to be about the same as
in 2003. Production in 2003 was likewise steady. Such
stability would be highly unusual in an industry where
typical shifts in output have become much larger than in
the past.